What To Expect When Uber Hits The Stock Market
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Uber hits the stock market tomorrow. Its value may reach $90 billion, a wildly high figure for a company that's never ever turned a profit. Uber's made money but not more than it has spent. Uber leaders have a story about how they'll be profitable one day, and that story is directly at odds with the populist movement sweeping America. Here's NPR's Aarti Shahani.
AARTI SHAHANI, BYLINE: Uber's plan is simple. Become a monopoly in transportation. Uber will use the money Wall Street pumps into its corporate veins to deal a death blow to the ride hailing competition like Lyft to take over food delivery as well as the trucking industry. Also Uber's self-driving cars will replace human drivers, saving money that way.
DANIEL IVES: That's really the golden goose for Uber and its investors.
SHAHANI: Daniel Ives, managing director at Wedbush Securities - he says Uber is a great bet. His main hesitation is when self-driving cars will be ready. He's not particularly worried by the backlash over Uber's labor practices or size. Sure, we've got major presidential candidates saying they'll smash tech monopolies like Amazon, but...
IVES: We believe it's manageable. And right now the bark's worse than the bite.
SHAHANI: Ives and many analysts take comfort in the example set by another tech giant, Facebook. It ran roughshod over privacy laws and raised alarms over monopoly behavior, and the government didn't really put a stop to it. After the CEO said he expected to pay a multi-billion-dollar fine to regulators, his stock jumped more than 7%. That was investors saying the fine isn't a real threat; we're betting on your future. If a progressive presidential candidate won the 2020 election, that would be a real threat to Uber. Ives...
IVES: At Uber headquarters, there'd be a lot of alcohol because they know there could be dark days ahead.
SHAHANI: To buy Uber stock and hold onto it is to assume that history is a guide, that the route Uber took to get as big as it is will not be blocked anytime soon. Matt Stoller, a fellow at the Open Markets Institute, describes that route. He says Uber just showed up in cities, ignored the rules governing taxi cabs, even hid from government employees.
MATT STOLLER: They go into cities. They get a bunch of customers, and then they get those customers to lobby their city council to change the law.
SHAHANI: In the next phase, Stoller says, Uber will try to steamroll over anti-trust laws. Only today is different from, say, 2012 when Facebook went public. During the Clinton and Obama years, the top Democrats did not take on corporate power, and that was a departure from the party's norm, Stoller says. Now some Silicon Valley insiders and top Democrats are putting monopolies back on the chopping block.
STOLLER: There is substantial dissatisfaction with lawlessness in white-collar America, and I think that is going to change.
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SHAHANI: And then there are the workers, the populist movements at the grassroots. Yesterday in San Francisco, Uber drivers in their cars circled the company headquarters, honking to demand a living wage.
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SHAHANI: A couple hundred protesters crowded the sidewalk and then, following the beat of a marching band, poured onto Market Street, blocking all traffic.
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SHAHANI: Mostafa Maklad has been driving with Uber for almost four years, and he says he's never rallied before.
MOSTAFA MAKLAD: For me, this is the first one.
SHAHANI: It's the first time.
MAKLAD: Yeah. There have been several attempts before, but every time when people go organize against Uber, Uber has always been managing to shut it down or kill it.
SHAHANI: Maklad feels emboldened. A California court ruling says Uber and Lyft drivers may be employees entitled to benefits. He got to go to the state capitol and meet with the governor about it. Over in New York, another major market, drivers want a minimum wage. Even if these are outliers, Maklad says, his boss, Uber's, position is weakening.
MAKLAD: If they're not going to reach out to us, the law will force them to.
SHAHANI: Uber has been ramping up for that fight. They've hired top Democrats and donated almost exclusively to that party. These old tricks of the trade may not do enough to mute the populist momentum, though what Uber is really worth will depend on it. Aarti Shahani, NPR News, San Francisco.
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